Questions Surround Accuracy of Federal Flood Maps

Wondering if you need flood insurance? There are maps for that.

But some say the federal flood maps are inadequate and misleading, causing thousands of homeowners to avoid purchasing needed flood insurance. And even Federal Emergency Management Agency officials have said FEMA is moving away from a binary depiction of “in or out” of flood areas.

For now, a growing number of critics are questioning the system currently in place.

Researchers at North Carolina State University added their voices to that group earlier this month. Their report highlighted how only about 4% of homeowners nationwide have flood insurance, “a problem that can be largely attributed to the flood maps created by the Federal Emergency Management Agency.”

In a November interview with Insurance Journal, Craig Poulton, CEO of Salt Lake City-based Poulton Associates, which sells its own type of flood and catastrophe insurance, specifically called attention to the horizontal formatting of FEMA’s flood zones. For this reason, he believes the flood zone map doesn’t paint the whole picture: flooding is vertical, at different depths depending on topography.

“It won’t tell you all you need to know,” said Poulton, a frequent critic of the NFIP. “It will only tell you whether you’re in the flood zone or not. And very often, it is lying to you about flood risk.”

FEMA flood maps show designated flood zones, known as special flood hazard areas, that are considered most susceptible to a so-called 100-year flood event. Most federally backed mortgages require homeowners in those areas to purchase flood insurance. Outside of those zones but still in low-lying and vulnerable areas, however, flood insurance is not strictly required, prompting many property owners to forego policies–even though coverage can cost less than $2,000 a year on average, experts have said.

Hurricane Ian shined a stark spotlight on the issue of flood insurance when it caused widespread storm surge and inland flooding across parts of Florida in late September. Thousands of homeowners were flooded in the storm and its aftermath, but few carried flood coverage through FEMA’s National Flood Insurance Program or through private carriers, reports have indicated.

At the core of Poulton’s argument is that the country’s flood insurance maps “should not be shape files on the surface” of a map. Instead, he believes they should be pin dots of low-lying structures across the United States. Looking at vertical land levels is more valuable than broad horizontal swaths.

To visualize why he believes this, Poulton described a hypothetical scenario in which a scuba diver swims into an ongoing flood. The diver can see some homes in a flood zone have been inundated to four feet, while others don’t have any water touching their first floors.

And while Poulton did acknowledge the NFIP is now pricing its flood insurance on that pin-drop modality, it still uses those horizontal shape files to define who must purchase flood insurance.

“So the people who are in those hard shape files should feel hard done-by,” Poulton said. “Because they are. They’re being forced to buy flood insurance, when other people with exactly the same, or higher, flood risk are not being forced to buy flood insurance.”

Or, from another lens, while the NFIP will charge homeowners adequate fees to protect their homes from flooding, they won’t require homeowners to purchase policies if they live outside designated flood zones. Poulton sees a disconnect in the NFIP flood maps and the way the organization prices risk.

“So, the NFIP communicates two different things,” Poulton said. “‘You really need insurance … It’s going to cost you $1,750 a year. But you really don’t need insurance because you’re not in the flood zone.’ Which one of those are you going to go with? And if you never price your risk with them, you believe you don’t have risk, because you’re not in the flood zone.”

According to the FEMA website, the NFIP is managed by FEMA and is delivered through a network of more than 50 insurance companies and the NFIP Direct. It provides flood insurance to property owners, renters and businesses and is available to anyone living in one of the 23,000 participating NFIP communities.

FEMA leaders have recognized some of the issues. David Maurstad, senior official of FEMA’s Office of Resilience and senior executive of the National Flood Insurance Program, said in a statement to Insurance Journal that homeowners outside of the designated flood zones should always evaluate the need for flood insurance “because flooding happens outside of high-risk areas.”

The agency would not comment directly on the NC State report, but officials have said that FEMA is moving away from the binary depiction of flood areas. The FEMA website shows that property owners can petition the agency to reconsider a flood designation, but no path appears available for those who want to be included in flood zones.